Bob Hunt is chief executive of Paradigm Mortgage Services
In case any adviser reading this is short on time, this is the ‘Executive Summary’ of the article and no doubt (initially at least) you’re going to feel like you’ve read it before.
That’s because it’s the article about General Insurance, it’s the article about making sure you cover off the GI needs of your clients; it’s the article which goes on to say that if you don’t provide GI advice, or refer on to specialists, then you’re in danger of losing the client entirely; it’s the article that suggests clients who are not provided with GI advice by their adviser are much more likely to use the online aggregator sites where they will purchase an ultra-cheap, poor quality inferior product; and it’s the article which again warns you against allowing this to happen because those online aggregator sites are going to be using all means at their disposal to service the client’s other financial services needs.
It’s all of those articles, with a little bit more thrown in about how the FCA itself is concerned about the poor value of some GI products, specifically the low claim acceptance rates of some companies/products. It’s the article that covers the most-recently published data from the regulator which highlights how some insurers claim acceptance rates are in the 75-79.9% tier, compared to others up at 97.5-100%.
It’s the article which suggests that, with advisers offering GI advice, there appears to be an opportunity to ensure the quality of the product and to provide greater confidence in terms of the ability to get claims paid.
So, effectively I can stop writing now, can’t I? No doubt you’ve heard this argument many times before; you’ve maybe read a number of articles on this theme without possibly knowing about the most recent claims data.
And even knowing all this, and being aware of the opportunity that exists, it’s still not going to bring you into this sector or even make you refer your clients on to the specialist referral intermediaries who have moved the market on considerably.
Because that should be a big deciding factor for all those intermediaries who remain on the outside looking in – the changes that have taken place in the referral space and the way GI suppliers have reacted to the specialists who have built these incredibly slick, technology-driven referral processes.
The suppliers have effectively changed the way they operate in order to work in tandem with these specialists, meaning they can offer multi-insurer options that previously did not exist.
It has upped the ante considerably on the delivery of quality products, which absolutely meet the client’s needs, and it also takes the referral process for advisers a number of steps forward.
As mentioned, the passing of client details and the communication with you and your client is incredibly slick, the choices the clients are offered are infinitely better, and as the adviser the fees/income you receive are almost the same as you would get if you were conducting the business direct.
So, while you’ve undoubtedly read this type of article before, perhaps the decision you make after reading this one – if you’ve got this far – might be different. The referral option should not be viewed as a ‘poor relation’ to providing the advice yourself; in fact, given the specialists involved you could say you’re providing your client with the most appropriate advice available.
In that sense, this is not the same old story as before, it should be a new chapter for your business.